Analysis of the Advertising Industry in 2015 Sample for Students

Question: Carry out Five Forces Analysis of the Advertising Industry in 2015. Answer: Porters Analysis Threats of new entry The agencies that operate on a full-time basis has more demand in the market.The use of internet is very high in the current market. Researchers have proved that a person spends around 13 hours surfing in the internet.Hiring employees that are skilled and can work efficiently is low with respect to digital advertising. Bargaining power of suppliers Plenty of suppliers are present, but some have influential power for which they charge high pricesBidding on a real-time basis will increase the demand on the portals Bargaining power of buyers They are the clients of the agencies The agencies can change the campaign patterns according to the clients Clients try to maintain long-term relations with the agencies Threats of substitutes Substitution is high for example print media, Radio and TV Advertising through radio increased in 2015 Rivalry by existing competitors The traditional agencies are shifting towards digital advertising Some agencies are well-known because of innovative campaigns (McAlister et al. 2016) The strengths that be seen from the analysis are that there are low threats regarding the new entries in the advertising industry. The bargaining power of the suppliers is very high, but of that of the buyer is medium. However, it can increase in the coming years because of new entrants in the industry. The attractiveness in the advertising industry is physical in nature mainly. The advertising agencies have understood that beauty sells in the modern world, which has led them to endorse their brands through celebrity, famous spokespersons and various models (Rosengren and Bondesson 2014). References McAlister, L., Srinivasan, R., Jindal, N. and Cannella, A.A., 2016. Advertising effectiveness: The moderating effect of firm strategy.Journal of Marketing Research,53(2), pp.207-224. Rosengren, S. and Bondesson, N., 2014. Consumer advertising as a signal of employer attractiveness.International Journal of Advertising,33(2), pp.253-269.